For answers to additional questions you may have, please call us at 847.412.1414 or email info{at}mgwelbel.com

 

MGW works will all professional design groups that fall into the Architects and Engineers category, including:

Commercial architects, residential architects, civil engineers, structural engineers, electrical engineers, mechanical engineers, forensic engineers, industrial engineers, transportation engineers, sustainable “green” design engineers, landscape engineers, chemical engineers, systems engineers, agricultural engineers, telecommunications engineers, theater consultants, sound and light designers, construction managers, interior designers, landscape architects, land surveyors and urban planners.
 

Professional liability insurance protects your company from damages that result from performance of professional services.  Note that coverage for errors, contract disputes, and other critical elements of professional liability insurance is not provided by a commercial general liability policy.  MGW works with competitive, reliable, world-class insurers to customize policies that meet the specific needs of its A&E clients based on industry trends, firm history and growth plans, risk profile, and other core strategic attributes.
 

Client relations, HR activities, firm portfolio strategy, risk management procedures, contract development, project portfolio, fee administration, acquisitions or divestitures, and many other internal and external firm practices have a major impact on your professional liability.  It is typically those aspects which may seem to have less impact and which go unnoticed that leave you most exposed.

MGW optimizes our architectural, engineering and other design firm clients’ professional liability coverage and/or renewal positions by continually and proactively manage the many diverse business components which directly and indirectly impact liability.  MGW employs a total-firm approach which includes a wide and deep cross-functional assessment of your firm’s strategies and procedures (including Human Resources, Risk Management, Operations, Quality Control, Client Relations, Contract Development, Communications, etc.), measure of and realignment with your risk profile, and development and selection of a customized, highly competitive professional liability insurance plan.  

For more information on what daily practices your firm is employing that may have significant unidentified professional liability implications, please contact us.
 

A firm’s strategies, policies, and practices can be optimized to improve its professional liability posture.  The following are just a few areas which should be addressed: 

Contract Management: All projects should be governed by a thorough and binding contract which clearly and unambiguously delineates scope of services.  If your client drafts the contract, be certain to have it reviewed by counsel or your insurance broker if they are qualified.  As lawyer-brokers, MGW is uniquely capable of providing contract development, review, and negotiation services

 

Project and Portfolio Management: Accept only those assignments that are consistent with your core competencies.  Adhere to the provisions of the contract and do not assume obligations beyond the agreed scope of services.

 

Total Quality Control/Quality Management: Design, implement, and strictly enforce a Total Quality Control program across your firm.  Measure your increased efficiency and client satisfaction as you enhance your professional liability insurance posture.  MGW has strong relationships with strategic partners who can assist architectural, engineering and design firms in customizing world-class, industry-specific Total Quality Control programs.
 

Risk Management:  Claims made against architects, engineers, and other designers often can be avoided with creative, aggressive, and proactive Risk Management.  With a dedicated practice area to Risk Management, MGW can assist you with contract review, continuing education, subcontractor qualification, process documentation, change order procedures, case studies, and other expert industry resources. 

Fee Management: Collect your fees according to an agreed upon schedule.  Do not sue your client for fees unless you are ready to defend a malpractice claim.  Track direct reimbursables.

Metrics: Isolate and track revenues associated with all projects, segmented by degree of risk.  Also measure costs associated with interior design, feasibility studies, redundant design, and abandoned projects.
 

Renewal is a suboptimal time to change brokers.  You are then usually in a position of merely selecting the lowest priced option vs. the best advocate and provider. 
 

As your practice evolves, so will your professional liability insurance needs.  MGW will review your current situation, understand your firm objectives, and realign your insurance to fit your business strategy.  It is preferable that this is managed proactively, not at a time when you are pressured to quickly find a broker because your policy is expiring.

 

Typically MGW’s clients are firms that have evolved and become more sophisticated or complex such that their current broker cannot fully meet their new strategic and firm-specific professional liability demands.

 

Your professional liability broker should have the skill set and experience to provide the following services at the highest quality:

Market Representation: Your broker offers representation in the insurance marketplace and must have a good pulse on market activity, the nuances to and criteria of the various underwriters, how to best present your firm, etc.  As your advocate, your broker is not merely a conduit to the markets, but rather offers you invaluable counsel on policies and practices to employ in your firm and how to answer questions on applications while assisting the underwriters in their interpretation of your responses in determining your coverage and/or premiums.

Professional Counsel: Your broker delivers some of your most important risk management and liability insurance advice.  The best broker will seek to intimately understand more than just your claims activity and coverage requests, but rather will work with you to understand the professional liability implications to your total firm activities so that policy and firm are strategically aligned continually as your firm evolves.

 

Loss-Prevention Support: Your broker should review and help negotiate your professional service agreements, assist with counsel selection, and guide you to relevant professional development opportunities

Claims Advocacy: Your broker should have a deep understanding of the expectations of all parties in a claims process, including clients, attorneys, insurance company claims representatives, etc., and be able to guide you through the seemingly unwieldy process so you can remain focused on your business.  Your broker is your key resource to connecting you to other professionals that can help manage the process, including experienced counsel, consultants, public relations executives, etc.
 

Industry Expertise: Your broker should be a specialist in professional liability insurance for design firms who can respond effectively and responsibly to the unique requirements of your practice.   The specialty broker should demonstrate commitment to and deep experience in the fields of architecture, engineering, and design as well as professional liability insurance to provide you with the best customer service possible.

 

Only the professional liability insurance specialist is able to maintain the trust and respect of key underwriters as well as the in-depth and up-to-date knowledge of design firm issues, including risk management procedures, logistics and operations, and contractual complexities.  MGW brings a specialized focus of and extensive experience in servicing architectural, engineering and design firms and a commitment to those professions, with affiliate memberships in trade associations, hosting industry-specific professional development opportunities, and a broad network of similarly specialized consultants to support your practice across a variety of functions.
 

Yes.  Care must be taken to assure the following:
·    Retroactive coverage is not less than the expiring policy.
·    All additional insureds, including predecessor firms, continue to be
      covered by the new insurer.
·    No unreported claims or potential claims are lingering.
·    No two policy forms are identical.  Be certain that you know the
     differences.

 

Professional liability insurance premiums are based on various quantitative and qualitative factors, including the following:
  

·    Qualifications and experience

·    Firm size, executive management, and infrastructure

·    Quality controls and risk management procedures

·    Contractual liability

·    Project portfolio

·    Services performed

·    Design discipline

 

MGW works with its clients continually, between and during renewal periods, optimizing client firm policies, procedures, and practices across various functions and disciplines to ensure that they are best poised at renewal periods to receive the most comprehensive, competitive, and strategically aligned policies.
 

As one of the largest specialty brokerages in the markets we service, MGW has competitively advantaged scale negotiating capabilities.  It is not our size alone, however, which enables us to control our clients’ costs of coverage significantly better than our competitors.  In fact, the notion that the biggest broker wields the most negotiating prowess is a myth.  It is the relationships we have with the major insurers and the trust, respect, and value they place on our architect, engineer, and design firm-specific knowledge of our clients’ needs and portfolios that allows for a very efficient and competitive bidding process by the insurers and, ultimately, the best written policies at the best prices for our clients.
 

Our deep Architect, Engineer and other professional Designer client-base and extensive experience provides us with unparalleled access to the most competitive and comprehensive markets.  We are constantly evolving our network to ensure our clients have the best coverage at the lowest rates.  Current insurers with whom we work include:
ACE, Argonaut, Axis, Beazley, Carolina, Catlin, Chartis, CNA, Colony, Darwin, Essex, Evanston, Interstate, James River, Liberty, Lloyd’s, National Casualty, Navigators, RLI, Travelers, Valiant, XL, Zurich.
 

Our reach is growing rapidly to best service our clients around the globe.  MGW is currently licensed to broker insurance policies in Illinois, Wisconsin, Indiana, Missouri, Ohio, Michigan, Texas, California, Nevada, North Carolina and Washington, D.C.
 

With 4 unique practice areas in Crisis Management, Risk Mitigation, Strategic Planning, and Coverage Advocacy, we work with our clients continually, between and during renewal periods, to optimize those strategies and operations which increase efficiency and preempt adverse professional liability effects.  As lawyers who broker professional liability insurance, we are valued by our A&E and design clients who seek and appreciate the unique perspective we are able to offer across the firm’s various day to day operations, including contract review and negotiations, counsel regarding potential claims, etc.
 

Yes, notwithstanding contract requirements, all employers need to provide for workers compensation coverage.  This typically is satisfied by way of insurance, however self-insured programs also are available. 

 

For most professional service firms CGL coverage is one element of a package policy that provides a broad array of coverages important to protect your business and potentially personal assets.  

 

 The standard of care provision in a contract defines the legal standard or measure of reasonable service levels clients can expect from the design professional.   When entering into a contractual agreement it is critical not to commit to providing a standard of care greater than the normal standard under common law of reasonably competent designers servicing a like-project in a like-community.  This is an important legal foundation if the issue of negligence is claimed.  You can be held negligent if found not reasonably competent or if you have failed to exercise due care under the circumstances.
 

The standard of care should be used to guide professional conduct and contractual matters.  Accept only those projects which are within your scope of core competencies, ensure that your less experienced staff is carefully supervised by senior personnel, and retain outside qualified contractors to supplement your internal capabilities if necessary.  Confirm that your contract clearly delineates reasonable expectations.
 

The burden is on the design professional to stay current with the evolving mandates regarding standard of care in your area (note there are regional variations in standards).  Continuing education seminars are available to enable you to stay updated.  MGW can assist in reviewing your contracts as well as recommending continuing professional education opportunities for the design professional.
 

You as the architect or designer are the ultimate owner of all plans, drawings, specifications, reports, and other documents which you produce.  They are instruments of the service for which you are engaged and not transferrable products.  Any reuse by your client can and should be offered only for negotiated additional compensation.  To protect yourself against unapproved and unqualified reuse you should include a ‘hold harmless and indemnity’ clause for unauthorized reuse in your contracts. 

MGW assists their clients with contract development to ensure that such matters as ownership of documents, copyright protection, etc. are carefully considered prior to project kick-off.
 

Yes, you as the consultant whom the client hired remain liable for the work product of the sub-consultants you engage.  While a third party’s having coverage does not serve as a shield to your liability, you should only utilize sub-consultants who have equal or greater coverage than your firm to ensure there is a source of recovery in the event that you seek indemnification against them for involving you in their errors.
 

Not necessarily.  Design firms are often asked to be part of a contractor –led design/build team.  Under this structure the architect typically is not responsible for the acts of the contractor.  The risks, therefore, are generally equivalent to when providing services for an owner.  The dynamics of the project delivery system are sufficiently different, however, and an understanding of the implications is required. 

Design/build is gaining traction as a project delivery method.  Design firms, however, are more accustomed to the traditional design/bid/build approach.  When the designer is working for the contractor, the designer has a new master and one with different requirements.  The lead design professional must be sensitive to this role and must fully understand how their obligations differ. 
 

 Yes, project-specific policies are available from certain carriers.  These types of policies are generally written for projects with construction values over $1mm.  The policy generally covers the architect and named design consultants for the term of the project plus a stated discovery period after construction is complete.   Billings associated with a project-specific insured engagement offset the premium of the firm’s overall policy.  Please contact us to discuss whether it is advisable for you obtain a project-specific policy.

  

For answers to additional questions you may have, please call us at 847.412.1414 or email:  info{at}mgwelbel.com.
 

Yes, there are very significant risks.  Construction contracts generally include warranties and guarantees.  Professional liability insurance policies for designers typically exclude coverage for warranties and guarantees.  MGW reviews contracts for design professionals to ensure that they are aligned with their clients’ risk profile and professional liability insurance coverage.